Trade negotiations between the EU and Canada concluded in October 2013, but France and Germany now want to make changes to the CETA agreement’s investor-state dispute settlement (ISDS) clause. EurActiv France reports.

While the free trade agreement between the EU and the US is still under negotiation, the deal between the EU and Canada is, at least in theory, all but wrapped up.

But French and German ministers now want to review the content of the Canadian agreement, in order to remove any potential difficulties from its dispute settlement mechanism, the ISDS clause. The clause is designed to protect investments by allowing recourse to arbitration tribunals in the case of conflicts between private companies and states.

The French Secretary of State for Foreign Trade, Matthias Fekl, travelled to Berlin on 21 January to discuss the issue with the German Minister for the Economy Sigmar Gabriel, and the State Secretary at the German Federal Ministry for Economic Affairs Matthias Machnig.

Joint declaration

In a joint declaration, the ministers of the EU’s two largest economies asked the European Commission, which steers trade negotiations on behalf of the 28 EU member states, to examine “all the options for modifying” the ISDS clause in the agreement with Canada.

This request from Paris and Berlin comes after the Commission published the results of a public consultation over the inclusion of the ISDS in the EU-US trade deal currently under negotiation, the Transatlantic Trade and Investment Partnership (TTIP). An overwhelming majority of the 150,000 responses opposed the mechanism.

Yannick Jadot, the TTIP spokesman for the Green Party in the European Parliament, said the declaration did not go far enough. “The member states need to understand that the European citizens do not just want the arbitration clause to be adjusted, but for the whole mechanism to be abolished,” he said.

If French and German opposition to the arbitration clause is nothing new, France and Germany are breaking new ground in asking for the negotiations with Canada to be reopened.

A source in the French Ministry of Foreign Affairs welcomed the development. He said, “What is important is that the Germans are for the first time accepting the link between the arbitration clauses in CETA and TTIP”.

Negotiations on the Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada began in May 2009. They were concluded in October 2013. The ratification will begin in the first semester of 2015.

This next hurdle may prove difficult for the CETA agreement. Yannick Jadot said, “The Commission considers the negotiations to be finished, but the member states could very well say they are not satisfied”.

Though it comes at a later stage in the process, the debate over arbitration in CETA is closely linked to that of TTIP. If the principle of arbitration tribunals is accepted in one agreement, it sets a precedent.

For the Canadians, the dispute settlement clause appears non-negotiable. “Canada and the EU have negotiated an ambitious, balanced and beneficial agreement for both parties, which includes the ISDS, and we will continue our efforts to implement CETA as soon as possible,” a Canadian government spokesperson told EurActiv.

The European Commission has yet to respond to the French and German calls for renegotiation, but any backpedalling over CETA could weaken their negotiating position for TTIP.

Opposition to CETA in the European Parliament is strong, and the majority needed to ratify it is by no means guaranteed. Earlier this month, Matthias Fekl said, “The majority in France and Germany is not in favour of ratifying the arbitration clause in CETA as it stands”.

The current objective is to come up with proposals to reform the arbitration clause and reopen the debate during the first semester of 2015.

Background

Ottawa and Brussels started trade negotiations in 2009 and a deal was initially supposed to be concluded by the end of 2011.

That deadline was pushed back to the end of 2012 as the two sides tried to resolve differences over how much beef Canada can export and how much freedom EU companies will have to bid for Canadian government contracts.

The talks stalled again in 2013 over demands for protecting Europe's distinctive geographically defined products such as feta and gorgonzola cheeses.

Backed strongly by Canadian and European industry, the deal was originally presented as a straightforward way to reinvigorate economic growth for both sides and generate around $28 billion in new trade and business a year.

Negotiations between the US and the EU on the Transatlantic Trade and Investment Partnership (TTIP) began in July 2013.

If the treaty is signed, it will affect almost 40% of world GDP. The transatlantic market is already the most important in the world. It is estimated that TTIP could save the average European household €545 each year, and could cause the European Union's GDP to grow by 0.5%.

Investor-state dispute settlement clauses, increasingly part of free trade agreements, allow companies to take governments to international arbitration tribunals.

Timeline

2015: EU-Canada free trade agreement expected to be ratified across the 28 EU member states

Comments

Leave a Reply

As usual if the Germans don’t think they will make a killing they want to stop the world & want to get off so they jump into bed with the loony Isolationist Protectionist French to shut up shop. How will the EU ever negotiate trade deals worth their salt with this outlook? It’s no wonder the single market never gets finalised to include services & utilities!

0

| Hide Replies ∧

wvdplas

27/01/2015 16:01

This is as it should be and is good news.

CETA was always just going to be used as a trial balloon for TTIP – and now that CETA will probably be rejected, it means that all the scrutiny can go to TTIP, the more sinister of the so-called ‘free-trade’ agreements.

This will come as a blow to the unpopular Canadian PM Harper who is facing an election in some months – one which he will most likely lose.

0

| Hide Replies ∧

David E.H. Smith

28/01/2015 23:40

But, If Not PUTIN; ‘The WHITE KNIGHT’, then Who Do YOU Want to Save the harmless NON shareholders from Fast Tracking TPP’s, CETA’s Secret ‘Death-Star-Chamber’ Tribunal Penalties? Will China, Iran, the Muslim World, et al, Support Putin in Suits? New ‘Savvy’ Head, Matt Salmon (R), May Demand corp’USA’ & Feds Prepay $Billions for All of TPP’s, TTIP’s, et al, Secret (‘Death-Star-Chamber) Tribunals’ Punitive Damages to Protect Home State’s Taxpayers; other States, Municipalities, et al, “…(we) need to control corp. USA’s ‘Contributions'”. How Much are You Selling your Right to Sue the Global Corporate Economy for? TPP, TTIP, et al, ‘Trade’… Read more »

0

| Hide Replies ∧

David E.H. Smith

28/01/2015 23:42

Isn’t the following Letter why GERMANY, France & other EU nations hate corporates Canada & EU and their SHAREHOLDERS suing the harmless NON shareholders (ie. 95% – 99% of their populations) in the CETA & other ‘trade’ arrangements such as; TTIP, C-CITreaty, et al. ‘The MERKEL (Chancellor of Germany) Letter; To Sue, or, Be Sued?’ And, how much are ‘your’ federal representatives sharing with you about the Submission to The Supreme Court of Canada regarding the above? When did you write & ask them? Does the enclosed Letter help the NON shareholders understand why the ‘trade’ arrangements need to be… Read more »

Do the Global Corporate Leaders really want to Sign Treaties/’Arrangements’ (CETA, TPP, C-CIT/FIPA, et al) with Corporate Canada’s Pariah Prime Minister & Pay for The WAD Accord’s Compensations, etc? Pope Francis May have ‘Difficulty Apologizing to the PM Harper for Residential Schools’ Abuses while PM Continues to Blame & Punish Those Who He Has Been Deliberately Deprived of the Info including the EU? Other Religious Leaders may have similar Difficulties. Designer ‘Racism’; Do the Feds Thrive on Making Secret Deals with Native & non Native groups in order to Play Both Sides Off of Each Other? ‘YOU’ Committed, &/or, Enabled… Read more »

0

| Hide Replies ∧

David E.H. Smith

29/06/2015 07:27

EU Acknowledges Pre-existing CHALLENGE to CETA; Thank you. *** President Jose Barroso (EU Commission), President Herman Van Rompuy (EU Council), President Schulz (EU Parliament), citizens of the European Union, et al; Thank you for acknowledging the European Union’s Commission’s receipt of: “The NOTIFICATION of Pre-existing CHALLENGE to the Canada – EU Comprehensive Economic & Trade Agreement (CETA)”, #00000001. I look forward to: 1) your answers to the enclosed, simple & basic questions and the answers to any of our future questions & 2) sharing with you, et al, more of the relevant information that you may have been deprived of.… Read more »

0

| Hide Replies ∧

David E.H. Smith

30/07/2015 01:47

TTIP, CETA, TPP & Global Treaties/”Arrangements’; ‘Three Card Monte’. Global Corporate Associates have been ‘Passing’ Legislation in Anticipation of Suing Once Ratified. ‘Trickle’ Up & Out Economics. by David E.H. Smith, ‘Qui tam…’ • As well as the PM of New Zealand admitting that medicines will cost more in New Zealand, have the citizens of the EU also noticed similar moves like Canadian Prime Minister Harper below? “To help pay for the harmless taxpayers ‘guilty transgressions’ against Global Corporations in Canada, Prime Minister Harper has recently cut the funding for health care by $36 billion dollars”. (please article below) Americans,… Read more »